June, 2013 | Shah & Associates, P.C. Estate Planning & Business Law Blog
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Inquiring Minds (Like Me!) Want to Know: Who Feuded Over National Enquirer Fortune?

June 26, 2013

Filed under: Inheritance,Litigation — Neel Shah @ 5:27 pm

The founder of the National Enquirer tabloid magazine, Generoso Pope, died in 1989. His two beneficiaries were his wife, Lois Pope, and his son, Paul Pope. Years later, Lois and Paul are again in court over Generoso’s multi-million dollar estate.

the scoop

(Photo credit: &y)

When the National Enquirer was initially sold, Lois received $200 million, and Paul received $20 million. Lois recently filed court documents claiming that her son has been harassing, stalking, and threatening her because he wants more of her inheritance.

According to court documents, Lois once gave her son $8 million and bought him a yacht. After that, the two have been involved in nonstop litigation. Paul has most recently demanded another $875,000 from his mother. Neither attorney has commented on the case.

Lois claims that, when she refused to pay her son, he spread public rumors about her through a gossip columnist. Included in these rumors, Paul claimed that Lois planned to kidnap one of his children. Lois countered that Paul asked Lois to kidnap one of his children so that he could get the kidnap insurance. Paul also maintains that Lois throws lavish parties to the tune of $1 million, and that she owns a private jet to transport her 18 dogs.

(and, no, this blog post was not written in the checkout aisle at our local grocery store!)

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RUN FOR SHELTER!!! Or Don’t? Is a Credit Shelter Trust Still Necessary?

June 19, 2013

Filed under: Estate Planning,Estate Taxes,Trusts — Neel Shah @ 10:00 am

Before the statutory portability provisions were made permanent, people often used Credit Shelter Trusts (“CSTs”) in order to maximize the estate tax exemption of the first spouse to die. The use of CSTs therefore reduces the estate tax on the entire marital estate. As a recent article discusses, however, the need of CSTs has been called into question after portability was made permanent.

The portability provision automatically allows married couples to utilize their combined exemption amount. In 2013, this exemption amount was $10.5 million. For high net-worth families, however, a CST is still a beneficial estate planning tool for saving estate taxes.

It is important to understand that, under portability, a deceased spouse’s exemption freezes at the time of his or her death. Therefore, if the first spouse dies many years before the second spouse dies, he or she could miss significant estate tax savings. CSTs are also beneficial for appreciable assets. The value of any assets placed in a CST is frozen at the time of the spouse’s death. Therefore, if the assets were worth $1 million at the time of the spouse’s death, and $5 million when the surviving spouse dies, all $5 million would be excluded from the estate of the surviving spouse.

Estate Planning: Lessons from Warren Buffett

June 12, 2013

Filed under: Estate Planning,Inheritance,Wills — Neel Shah @ 2:48 pm

One of the most interesting parts of Warren Buffett’s estate plan is how he designed it to leave his children just enough so that they can do anything they like, while also not leaving them so much that they never have to do anything. As a recent article explains, many people would like to replicate this part of his estate plan.

Warren Buffett

Warren Buffett (Photo credit: MarkGregory007)

Many parents wonder how much they can leave their children, before their children become lazy spendthrifts. However, simply leaving money to children may not be the whole problem. As Warren Buffett recently explained, “I think that more of our kids are ruined by the behavior of their parents than by the amount of the inheritance.” Parents who do not want their children to grow up as spoiled brats should focus on the environment that they raise their children in, rather than the inheritance they will give them.

Buffett also believes that it is “crazy” for your children to read your will for the first time after you have died. This is because communication is key to a smooth estate transition. If you discuss your will with your children before your passing, you stand a far better chance of avoiding disaster after your death. Although this conversation may be awkward, it is often necessary to outline your intentions and reasoning.

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After Success, Don’t Forget About Succession

June 5, 2013

Filed under: Business Succession Planning — Neel Shah @ 8:00 am

The amount of work required to start a business, make it successful & keep it growing is substantial.  Unfortunately, the business owner isn’t done even when all that has been accomplished.

There are many challenges to developing a successful succession plan for your small business. Common challenges to succession planning include fear, confusion, uncertainty, an undefined action plan, and dysfunction. A recent article discusses how to overcome some of these challenges.

Many succession plans are hindered about uncertainty regarding the economy, as well as the success of the business itself. To best shield the succession plan from uncertainty, be sure to hire the best employees possible for the transition. Moreover, attempt to lock in key employees who are vital to the businesses continued success.

An undefined action plan is particularly harmful to a succession plan because it can lead to gaps in ownership and poor follow-through. It is important, therefore, to integrate the succession plan into your strategic plan for the business. To keep the plan on track, consider documenting expectations, creating a timeline, and crafting ways to measure success.

Lastly, dysfunction is often rampant with family business succession. Although this may be hard to avoid, consider communicating every aspect of your plan with your heirs. Be sure that your children understand the reasons for the decisions you have made, and listen to their concerns and opinions.

Importantly, remember that there is no standard solution for every business. If your business succession plan should stall, seek help from an experienced attorney or financial advisor.